Chua: Water deal reduced Penang’s debt

PETALING JAYA: It was a water restructuring agreement where the Federal Government assisted the state government to pay interest-free instalments that has enabled Penang to reduce its debt, said an MCA leader.

“(Chief Minister) Lim (Guan Eng) has misled the people by boasting that the state's financial position is sound and that the state had reduced its debt,” said MCA Young Professionals Bureau director Datuk Chua Tee Yong.

Chua said Lim had repeatedly claimed the Pakatan Rakyat's Penang state government successfully sliced the state debt to RM30mil or 95% from RM630mil, when in reality, this was due to the water restructuring agreement signed between the state and Federal Government.

Chua added that the agreement was to assist the state government pay interest-free instalments, thereby transferring the financial burden from the state government to the Federal Government.

“It is regrettable that the DAP secretary-general has omitted informing the public this fact and on the contrary, tries to conceal it in order to boast about the improvements and achievements by the Pakatan state government,” he said, adding that Lim was taking advantage of the goodwill of the Federal Government.

Chua said the Federal Government carried out water restructuring exercises in six states.

The Federal Government, added Chua, also accepted Perak's RM900mil water debt, which was transferred to Pengurusan Aset Air Bhd (PAAB), a company under the Ministry of Finance Inc.

The water restructuring agreement resulted in Perak's RM900mil debt plummeting to RM99 million.

“Both states transferred their debts to the Federal Government, hence, it is not a debt reduction,” he said.

In total, PAAB absorbed the assets of water supply services in six states Johor, Malacca, Negri Sembilan, Perlis, Perak and Penang.

Source: The Star

Reference: http://thestar.com.my/news/story.asp?file=/2012/10/9/nation/12144319&sec=nation